U.S. corporate credit recovery rising

New York, NY, Jul. 13 (UPI) -- Fitch Ratings in New York said Tuesday corporate credit quality is making gains due to recent economic indicators pointing to an expansion.

Corporate defaults and downgrades have receded and upgrades have become more visible across the rating spectrum, Fitch said.

Despite volatile energy costs, rising interest rates, and the war in Iraq continue to pose risks, there is no denying that the U.S. corporate credit recovery is well underway, Fitch said.

"Leverage is declining, revenue and cash flow continue to expand, and more companies across more sectors are participating in the stronger results," said Mariarosa Verde, Fitch managing director of credit market research.

The group said its new study focused on key credit and financial measures compiled from a rich sample of 402 U.S. industrial companies rated A to BB. The aggregate par value of the group's public bonds totaled close to a trillion dollars at the end of the first quarter of 2004, or approximately 60 percent of all U.S. non financial outstanding corporate bonds.

The study found revenue and profit growth rather than shrinking debt balances have driven leverage down in the past year.

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